Case Note & Summary
The petitioner, M/s. Pepsico India Holdings Ltd., a company engaged in manufacturing aerated water, soft drinks, and fruit-pulp based drinks, was issued 20 show-cause notices for the period from 1.10.1979 to 30.6.1983 regarding disallowance of deduction towards post-manufacturing expenses. The Assistant Commissioner of Central Excise passed an order on 31.5.1996 disallowing the abatement. The petitioner appealed to the Commissioner of Central Excise (Appeals), who rejected the appeal on 14.1.1999. The petitioner received the copy of the order on 23.2.1999. Meanwhile, the Kar Vivad Samadhan Scheme, 1998 came into effect on 1.9.1998. The petitioner filed a declaration under the scheme on 31.12.1998, before receiving the appellate order. The Designated Authority rejected the declaration on the ground that no appeal was pending as on the date of filing. The court examined the scheme and found that the appeal was pending until the order was communicated to the petitioner. Since the declaration was filed before communication, the rejection was invalid. The court allowed the writ petition and directed the Designated Authority to process the declaration in accordance with law.
Headnote
A) Kar Vivad Samadhan Scheme - Tax Arrears - Section 95 of Finance (No.2) Act, 1998 - The petitioner filed a declaration under the scheme for settlement of tax arrears. The Designated Authority rejected the declaration on the ground that the appeal was not pending on the date of filing. The court held that the appeal was pending as the order in appeal was received by the petitioner after the declaration was filed, and thus the rejection was invalid. (Paras 1-10)
Issue of Consideration
Whether the rejection of the petitioner's declaration under the Kar Vivad Samadhan Scheme, 1998 by the Designated Authority was valid when the appeal against the assessment order was pending on the date of filing the declaration.
Final Decision
The court allowed the writ petition, quashed the order of the Designated Authority, and directed the Designated Authority to process the declaration in accordance with law.
Law Points
- Kar Vivad Samadhan Scheme
- 1998
- Section 95 of Finance (No.2) Act
- tax arrears
- dispute pending
- appeal pending
- declaration
- designated authority
- rejection
- writ jurisdiction
Case Details
2006 LawText (BOM) (01) 14
WRIT PETITION NO.1362 OF 1999
R.M. Lodha, Anoop V. Mohta
Mr. V. Sridharan with Mr. Prakash Shah and Mr. Bharat Raichandan i/by M/s. P.D.S. Legal for the petitioners. Mr. A.C. Singh i/by Mr. L.S. Shetty for the respondents.
M/s. Pepsico India Holdings Ltd.
Union of India, Designated Authority/Commissioner of Central Excise, Mumbai-II, Commissioner of Central Excise (Appeals)
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging the rejection of declaration under Kar Vivad Samadhan Scheme, 1998.
Remedy Sought
The petitioner sought quashing of the order rejecting the declaration and direction to process the declaration under the scheme.
Filing Reason
The Designated Authority rejected the petitioner's declaration under the Kar Vivad Samadhan Scheme, 1998 on the ground that no appeal was pending on the date of filing the declaration.
Previous Decisions
The Assistant Commissioner of Central Excise passed an order on 31.5.1996 disallowing abatement. The Commissioner of Central Excise (Appeals) rejected the appeal on 14.1.1999, and the petitioner received the copy on 23.2.1999.
Issues
Whether the appeal was pending on the date of filing the declaration under the Kar Vivad Samadhan Scheme, 1998.
Whether the Designated Authority's rejection of the declaration was valid.
Submissions/Arguments
The petitioner argued that the appeal was pending as the order in appeal was received after the declaration was filed.
The respondents contended that the appeal was not pending as the order was passed before the declaration was filed.
Ratio Decidendi
An appeal is pending until the order is communicated to the party. Since the petitioner received the appellate order after filing the declaration, the appeal was pending on the date of filing, and the rejection was invalid.
Judgment Excerpts
The present petition under Article 226 of the Constitution of India is directed against the order passed by the Commissioner of Central Excise, Mumbai-II rejecting the declaration filed by the petitioners under Kar Vivad Samadhan Scheme, 1998 contained in the Finance (No.2) Act, 1998.
Procedural History
The Assistant Commissioner of Central Excise passed an order on 31.5.1996 disallowing abatement. The petitioner appealed to the Commissioner of Central Excise (Appeals), who rejected the appeal on 14.1.1999. The petitioner received the order on 23.2.1999. Meanwhile, the petitioner filed a declaration under the Kar Vivad Samadhan Scheme on 31.12.1998. The Designated Authority rejected the declaration. The petitioner then filed the present writ petition.
Acts & Sections
- Finance (No.2) Act, 1998: Section 95
- Constitution of India: Article 226
